Duncan: Putting Scotland first

Speech to Scottish Conservative Party Conference

Introduction - Alistair Darling

Seven years ago, Tony Blair promised Britain that his Government would make a difference. He managed to convince Britain that it was time for a change and Britain believed him. Despite the fact that Britain was continuing to grow and better itself under the Conservatives, Britain decided to choose a different path.

But Britain was conned. Scotland was conned. Labour has let us down. However, Labour Ministers seem to be oblivious to this. My opposite number, Alistair Darling, spoke at the Labour conference a couple of months ago. He admitted that Labour had a long way to go. How magnanimous of him! But then he said something which amazed me. He said: "Would anyone really say that things have not got better?"

Well I've got news for you Alistair: yes they would. Because for Scotland and Britain, things have not improved. Quite the opposite - they are worse than they were under the Conservatives. Labour truly has killed the goose that laid the golden egg.

But I suppose we shouldn't be surprised by Mr. Darling's words. After all, this is the man who told me at Scottish Questions a couple of months ago that he is, quote, "in the very happy position of always being in complete agreement with whatever the Government happen to be doing." Clearly, this is a man out of touch with the people - a Scottish Secretary who has horribly neglected Scotland.

Prominently, negligently, and tragically, Alistair Darling has stood by and watched as our fishing industry has been decimated by the Common Fisheries Policy. And it's going to get even worse, as the ten accession states - three of which are landlocked - are set to be given over £200 million of funding to update their fishing fleets, even if they don't have any.

Labour seem to justify the common ownership of our fisheries on the basis that it makes perfect sense. Fish, they eloquently say, can swim from one state's waters into another. But I rather suspect that fish would find it difficult to swim into the territorial waters of Hungary, Slovakia or the Czech Republic, since they're all landlocked! The reality is that Mr Darling could be a very influential figure in alleviating the plight of our fishermen. He could campaign, like me, for the end of the CFP. He has not. And it is unforgivable.

We don't really need much more proof of his negligence towards Scotland than his inaction over fishing…… but I've brought some more with me anyway! You see Alistair Darling isn't really a proper Scottish Secretary. He's the Transport Secretary who has "Secretary of State for Scotland" in small type at the bottom of his business card. But you would think, at least, that he would put Scotland first in his Transport role. Think again. Last week, his understudy Kim Howells said that he wanted to, quote "tax people out of their cars". What was going through Mr Darling's mind when he authorised that? It is bad news for everyone, particularly the people who live in areas with no viable public transport alternative. People in Lewis, in Thurso, in Newtonmore, in Auchtermuchty, in Jedburgh, in Whithorn and in the hundreds of other small towns and villages in Scotland for whom the car is an essential.

Mind you, Alistair "Road Toll" Darling can't be flavour of the month with the people of Edinburgh either, given his support for the Council's own attempts to tax honest, hard-working motorists off the road. Roads and the car should be the fulcrum of any transport system. Why can't Labour put people first for a change? Why can't Alistair Darling put Scotland first for a change?

Mr Darling's record on fishing and cars is characterised by complacency. Complacency. It's an excellent word to characterise much of Labour's behaviour recently. And it's a good way to describe their attitude to our evolving Union with the United Kingdom.

Two weeks ago, Scottish Labour MPs walked through the lobbies like obedient sheep following their master Darling. Principle finished a poor second to politics. That decision means that the constituencies for Westminster and Holyrood will be different. Confusion will abound, and a crucial aspect of the partnership between MPs and MSPs from the same constituency will be lost. Conservatives - not Labour - defended this central tenet of the devolution settlement, and Conservatives - not Labour - are prepared to take the bold steps to make devolution work. Our Union depends on it. And we will do it.

That's why the priority of a Conservative Scottish Secretary will be being the Scottish Secretary, not the Transport Secretary or anything else. So move over darling, because it's time for Scotland's voice in the Conservative Government of the United Kingdom to be loud and proud.

Whisky

Conference, Scotland's voice could have done with being a bit louder and a bit prouder over the issue of whisky tax stamps. These tax stamps will now have to be applied to every single bottle of whisky. 18 months ago, Chancellor Gordon Brown's Treasury dismissed these stamps as likely to, quote, "have a severe impact on the productivity and compliance costs of the spirits industry." But Mr Brown has gone on unabashed. He's another Scot in the Cabinet who seems unable to put Scotland first.

Neither the Chancellor nor the Scottish Secretary has paid the blindest bit of attention to the overwhelming evidence against tax stamps. Or the international evidence that shows that they do little to combat fraud. Or the evidence that shows that the stamps are easily forged. Or the evidence from the Scotch Whisky Association that they had a better way to combat duty evasion. Or the evidence that the move will erect barriers to entry and investment in the industry. Or the evidence which shows that one in fifty Scottish jobs will be put at risk by this damaging scheme.

Brown and Darling didn't even pay attention to their so-called friend in the north, Jack McConnell. Now the last thing I would want to do would be to drive a further wedge between Jack McConnell and Gordon Brown. I'm sure you've heard that they don't get on too well. You see there's a bit of a turf war over who runs Scotland. Their relationship took a turn for the worse recently, when Jack supported a Conservative motion in the Scottish Parliament expressing disappointment at Gordon Brown's whisky stamps and asking for reconsideration.

Predictably, this was ignored by Gordon, who is far more interested in getting one over on the First Minister than doing the right thing by Scotland. To allow victory in this Labour War to take precedence over what is right for Scotland's whisky industry is farcical and appalling.

We will not act so irresponsibly, and will continue to support attempts to save the industry from disaster. Whisky is one of our most important industries - too important to undermine. The tax stamp will be a feast for the fraudsters, but a famine for those who lose their jobs because of it.

Economy

But the whisky industry isn't the only sector suffering under Labour. For the whole economy is beginning to feel the pinch.

Labour has always liked to trumpet the economy as its big achievement. That's understandable - given the state of the public services, there's very little else to brag about.

Chancellor Gordon Brown likes to portray himself as the Iron Chancellor. "Prudence with a purpose", he always told us. In the early years, the prudence was certainly there. The purpose was vague, but the prudence was there. The reason for that, of course, is that during his first couple of years in Number 11 he followed Conservative spending and taxation plans. His prudence was actually our prudence.

But he quickly went back to his socialist roots. He disguised it for a few years by taxing through stealth. But now the mask is slipping. Last year, he made his first public, straight-forward tax rise, by increasing national insurance. The man with the iron mask may think that British workers didn't notice that extra one per cent coming out of their pay packets. He may have thought that British business didn't notice having to pay an extra penny on every pound they pay to their employees. But we did - all of us did.

Our message to Britain is clear - you ain't seen nothing yet. The Iron Chancellor has rusted, and if you vote him in for a third term, it's only going to get worse. Gordon Brown is the captain of a socialist supertanker which is making every one of us much worse off - very often with the most vulnerable suffering the most. He promised he wouldn't take our money and waste it, but it was a con.

Gordon Brown is the Kirckaldy Conman.

With 66 tax rises in all, he has taken the country's wealth - more and more of it - and spent it more and more inefficiently. Britain has to say to him and to Labour "you have let us down and we 've had enough".

The root of the problem is Gordon Brown borrowing beyond our means to finance his waste, and he is treating our people with utter contempt by not admitting it. He has arrogantly ignored warnings from respected, independent thinktanks like the IFS and Reform. From organisations like the IOD and the CBI. And from international organisations like the IMF and only two days ago from the OECD. They have all told him: "you're borrowing too much"; "your borrowing estimates are too low"; "you need to raise taxes by 15 billion pounds to meet your own fiscal rules"; "there's a multi-billion pound black hole in your country's economy". But he hasn't listened.

Of course, the question is: if things are going so well, why does he have to borrow so much?

The answer, needless to say, is that they aren't going so well. But he hasn't answered the question. Instead, he has belligerently pressed on with his socialist regime. He has borrowed on Britain's credit card, but he should give the people more credit. After all, they're the ones who're going to have to pay for it.

It seems that third term tax rises are now absolutely inevitable. And all this from the party which said they had no intention of raising tax. They've done it 66 times. Now they're more than likely going to have to raise the most public, tangible tax of all - income tax. As the Economist newspaper has said: "Mr Brown has been lucky. But luck is not enough." The truth is that Labour have let Scotland and Britain down, and they will pay for it at the ballot box.

Taxation and the United States

Conference, there is a better way. A Conservative way to small government and minimal state interference. A confident, coherent and free way, which explains why high taxes damage the economy and hamper the most vulnerable in our society.

When the State takes more from people in tax, those people tend to think their duty to society is discharged. "Why should I donate money to charity", they say. "I've already given much more to the government, and the government said they'll help the vulnerable people on my behalf". But why should we trust the government to spend our money more wisely than we can spend it ourselves? Surely seven years of waste shows that government just isn't as good at it as people.

Lower taxes give people the opportunity to make their own decisions. They can save it; put it aside for a rainy day. They can spend it; that'll help the economy. They can donate it to charity; that'll help to free voluntary groups from dependence on the state. When the government gives people more responsibility over their money, they become more responsible individuals - they have to. They feel more of a duty to society. Low taxes breed high morals. So it's time we stood up to the socialist, high tax, Labour establishment and said: "I want my money back….. because I can spend it better than you can".

Of course, the moral case is only half the story. There's also a strong economic case for lower taxes. This is something which has long been recognised in the United States of America, both by Republicans and by Democrats. Indeed, when he lowered the top rate of income tax from 91 per cent to 70 per cent, President John F Kennedy said: "The truth is that tax rates are too high today and tax revenues are too low, and the soundest way to raise revenue in the long run is to cut the tax rate."

More recently, when the United States went into a downturn around the year 2000 income tax was reduced at all levels by between three and five pence. The result? Economic growth peaked at an incredible 8.2 per cent in the third quarter of 2003. This has continued, and the overall growth in the last three quarters - 5.5 per cent per annum - is the fastest in 20 years.

Let's compare that to the situation in Scotland. Scottish growth rates in the four quarters of 2003 were zero per cent in quarter one, then half a percent, 0.6 and 0.2 per cent in quarter four. Half a percent in Scotland; five-an-a-half percent in the United States. Even the sluggish UK growth is about double that in Scotland.

High tax, high waste, low growth; or low tax, low waste, high growth. I think we can all agree which of those two Scotland and Britain needs.

That's why Oliver Letwin has said that, whilst cleaning up the mess left by Gordon Brown, he hopes to reach a position where he can gradually produce some tax reductions. He has also shown the required measure of caution - there is no point in promising swathes of tax cuts before he knows the situation in which he will find himself as Chancellor. That's the kind of responsible leadership our country needs. A clear aim of lower tax, but a sensible view that we need to assess the circumstances of the time.

European Model

But we make no apologies for making lower tax a key aim. Punitive taxation and low growth has caused a deep sense of pessimism amongst budding entrepreneurs. And it's a real shame, because we Scots used to be optimistic people.

Even when it came to our football team…..

We used to start businesses and take calculated financial risks in the hope that they would pay off. We don't do that anymore. Small business start-ups in Scotland have plummeted in recent years. Almost 25,000 businesses were started in 1997, but the figure fell every single year until 2003, falling under 17,000 in 2001. And the reason is that there is a lack of confidence in the economic environment.

In other words, high tax and crippling red tape mean it's just not worth the risk.

So we need economic liberalisation to ensure that Scots are encouraged to take a risk or two. And we need a change just to stop our talented youngsters being lost to other countries.

Sadly, that sort of dynamic, entrepreneurial, liberal system is not encouraged by many of our colleagues in the European Union. Instead, their current obsession is to tell us that we absolutely must sign up to the EU Constitution.

If we don't do it, they say, we'll have to leave the European Union. We won't be able to trade freely with our European friends and neighbours. They'll never talk to us again!

What a pile of nonsense. These are the same scare stories put forward by the same people who told us that if we didn't join the Euro, our economy would collapse before our very eyes.

However, the threat comes not from being out of the Euro, but from the reckless way in which Gordon Brown is using his stock of pounds. Our economy has managed to retain some pretence of strength precisely because we are not in the Euro. The Conservatives led the fight against the Euro, and we should not underestimate our achievement in winning the argument and forcing the Government to take it off the table in the short-term. It was crucial for Britain to retain her own currency and exchange rate, not just to prevent a loss of sovereignty, but to safeguard our economy. We are able to use the exchange rate as an economic tool, in the same way as we can use interest rates, direct taxation or government expenditure. If we had joined the Euro, this vital economic tool would have been lost. And looking at 4.4 million unemployed in Germany, I can't say I'm green with envy.

Conclusion - EU Constitution

So, we will never stop campaigning to keep the pound. And in the same way, we will relentlessly continue our campaign against the European constitution which, make no mistake, would signal the end of the United Kingdom as we know it.

Too many European political leaders arrogantly think that their views count for more than those of their citizens. Well let me tell you; the citizens of Europe haven't reflected this will, many of them will never have the chance to do so, and I don't think they should be taken for granted in that way.

I don't think Britons and Scots should be taken for granted that way. Because I don't think Britons and Scots want what is proposed in the constitution. I don't think they want a European President, a European Foreign Minister and a European legal system. I don't think they want a common currency and tax regime. I don't think they want common ownership of fisheries and oil and gas.

We want to be in a flexible, modern European Union. Quite simply, I don't think that Britons and Scots want a one-size-fits-all EU.

The message must be clear - other countries should do as they please, guided by the will of their people. But they must let us choose our own path too.

And I think that many of the peoples of Europe would agree with us. They want to be able to celebrate their diversity too, much of it new found and hard-earned after the wonderful demise of Communism.

They want to be Polish, and Swedish, and Czech…….. and we want to be Scottish and British.

Britain should be part of a Union of peoples who cooperate peacefully and trade freely, but who retain their own sense of nationhood and sovereignty. So the European Union should get back to being what it was originally supposed to be - a common market, not a common country.

Conference, the next year is hugely important both for our Party and for our country. The first step must be taken in four weeks' time at the European elections. It's time to send a message not only to Labour, but to the Euro constitution-loving Liberal Democrats and the Scottish Nationalist Party. That message must be that Britain will not be railroaded into a European superstate against her will.

And then we will move on to the General Election. The message must be just as strong.

Labour has let Britain down. Labour has let Scotland down.

From the clamour for a European superstate to the prosecution of traders who sell their goods in pounds and ounces instead of metric measurements which few understand and fewer want to use. Labour has let Scotland down.

But Conservatives will stand up for Britain and stand up for Scotland. We will stand up for our fishermen and those whose livelihoods depend on the industry. We will stand up for the whisky industry to protect the jobs which are in jeopardy. We will stand up for motorists and for entrepreneurs. And we will stand up for every person is the country by terminating the tax, spend and fail approach of Labour.